Addressing high drug prices is a top national priority for the overwhelming majority of Americans, Republicans and Democrats alike. And both Hillary Clinton and Bernie Sanders call for lifting the Congressional ban that keeps Medicare from negotiating drug prices as a way to rein in drug prices for older adults and people with disabilities. Controlling drug prices is particularly important given that per person drug spending in Medicare Part D is expected to rise 6.5 percent a year for the next 10 years.
The Centers for Medicare and Medicaid Services could save people with Medicare and taxpayers a substantial amount of money through drug price negotiation. But, the devil is in the details. A new report from the Kaiser Family Foundation suggests that some forms of drug price negotiation might not lead to lower drug prices, relying in part on a Congressional Budget Office projections.
The CBO projections turn on a narrow definition of negotiation. All you need do is see that every other advanced country reins in drug prices successfully for their citizens to know that negotiated drug prices in the United States can bring down drug prices. And, you don’t need a formulary for the government to do so successfully. If CMS simply negotiated for drug prices that the Veterans’ Administration secures or Medicaid or Canada, prices in the U.S. would fall sharply.
The pharmaceutical industry would likely threaten reducing their research. But, as it is, drug companies spend far more on marketing than on research. And, there are huge costs to allowing drug companies to set exorbitant prices for critical medications. Millions of Americans cannot afford the drugs they need.
Surprisingly, neither Clinton nor Sanders calls for negotiated drug prices for all Americans, which is the only way to ensure drugs are easily affordable and accessible for everyone. Sanders proposes letting people import from Canada, which would reduce prices for everyone. But, why make people go through that hassle? Clinton proposes some marketplace fixes to rein in prices. But, that’s wishful thinking given the monopoly power drug companies too often hold and the lack of price and effectiveness transparency in the drug marketplace, which does not allow for meaningful competition.
For a brief history of proposals to allow Medicare to negotiate drug prices, read this report from the Kaiser Family Foundation.
For information from Just Care on ways to keep your drug costs down, click here.